Christie Vetoes Bill to Raise Minimum Pay

By

Heather Haddon

Jan. 28, 2013 10:31 p.m. ET

Republican Gov.
Chris Christie
vetoed legislation Monday that would have increased the state's minimum wage to $8.50 from $7.25 an hour, setting up a fight with Democrats who are pushing to have voters decide on the hike in the fall.

New Jersey joins Connecticut and New York this year in considering increases to the minimum wage—an issue that has become central to many Democrats and organized labor, but has met resistance from Republicans and business groups.

Minimum-wage campaigns can galvanize progressive groups to turn out at the polls or lobby elected officials, but they tend to have a more difficult time gaining traction among employers in a stagnate economy, economic analysts said.

"People may not be feeling very generous," said
Linda Barrington,
managing director of the Institute for Compensation Studies at Cornell University. "You don't have employers that are naturally feeling the market pressures to raise wages to get the talent they need."

Twenty-three states—including New Jersey and New York—have a minimum wage set at the federal level of $7.25 an hour. Five states have no minimum wage and four others set it below the federal guidelines. The states follow the federal standard in both cases.

Ten states saw minimum-wage increases at the beginning of this year, all but one due to an automatic cost-of-living bump. At least 12 states are considering minimum-wage increases this year.

A wage increase on the federal level last took effect in 2009, and state initiatives tend to spring up after there hasn't been any national push on the issue for several years, said Jeanne Mejeur, state labor policy expert at the National Conference of State Legislatures.

During his budget proposal last week, New York Gov. Andrew Cuomo proposed raising the state's minimum wage to $8.75 from $7.25 an hour in July 2013. On Thursday, Connecticut will hold a public hearing on whether to bump up the wage to $9 from $8.25 an hour on July 1, and to $9.75 an hour in July 2014.

Under the bill passed by the Democratic-controlled New Jersey Legislature in December, the state's minimum wage would rise by $1.25 on March 1 and then automatically provide annual cost-of-living increases tied to the U.S. Consumer Price Index. Ten states allow for the automatic increases, though they tend to be harder to pass through state governments, political analysts said.

If enacted, New Jersey would have had the third-highest minimum wage, behind Washington and Oregon.

In his veto message, Mr. Christie called the Democrats' bill "lopsided" in not recognizing the concerns of small businesses paying for the wage increase and said that it would "jeopardize" New Jersey's efforts to recover economically.

Instead, Mr. Christie proposed an alternative plan that would raise the minimum wage by a dollar over a three-year period. He also would allow for a 5% increase in the Earned Income Tax Credit for low-income workers, a program the governor cut by the same amount in 2011.

Republicans and business groups applauded Mr. Christie's veto. But Democratic leaders decried the move and said they will push forward with an effort to put the increase before voters during statewide elections in November.

"The well-being of working people in this state should not be left to the whims of politicians to decide on every couple of years," said Democratic Sen. President Steve Sweeney.

The Assembly expects to put the measure up for a vote in February, and it would need to pass both houses by August to get on the ballot.

If the measure is put on the ballot, progressive groups expect to mobilize tens of thousands of voters to support the initiative, said Bill Holland, director of the New Jersey Working Families Alliance. The push could help voter turnout in a year when the governor and all 120 legislative seats are up for election.

A Quinnipiac University poll released last week found that 82% of the 1,647 New Jersey voters surveyed support increasing the minimum wage to at least $8.25, and 55% said it wouldn't hurt hiring among small businesses.

Minimum wage increases tend to be popular among voters as it's a benefit to help those who are working, not the unemployed, said Chris Rhomberg, an associate professor of sociology at Fordham University.

"It's a basic, core issue of standards for working people," said Mr. Rhomberg, who studies labor markets.

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